Beginning January 1, 2006, nursing home residents, including all those dually eligible for Medicare and Medicaid (the dual-eligibles) and many Medicare-only residents will enroll in the Medicare drug benefit (also known as Part D). The benefit will be administered by private health plans, managed care organizations, and pharmacy benefit managers (PBMs) acting as prescription drug sponsors. Many are groups that KPS Pharmacy does business with today. There will be enrollees in different drug plans within the same nursing home.

And, all dual-eligibles will no longer be eligible for drug benefits through state Medicaid programs; all drugs dispensed to these residents must be billed to patients’ Part D drug plans.

The Medicare drug benefit guarantees enrollees access to any medically-necessary drug. However, the drug plans are expected to use preferred drug lists and other pharmacy benefit management tools, such as step therapy, prior authorizations and tiered copayments, to manage drug costs. CMS is requiring that formularies include all drugs in six drug classes (antidepressants, antipsychotics, antiretrovirals, anticonvulsants, antineoplastics, and immunosuppressants) as well as the most commonly prescribed drugs in the Medicare population.

The law does exclude several classes of drugs from coverage under the Medicare Part D benefit, including over-the-counter medications, benzodiazepines, barbiturates, and weight loss/gain agents. It is possible that state Medicaid programs may continue to cover these drug classes for the dual-eligibles; we do not know at this time whether states will cover these drugs and if so, to what extent.

CMS has instructed plans to develop a policy that lays out the rules for transitioning people from their current drug regimen to plan-covered drugs; each effected nursing home and long-term care pharmacy should be made aware of the plan’s policy. Residents may still have access to non-formulary drugs, but you may need to get a prior authorization or go through the plan’s exceptions process for coverage. Plans must develop both a regular and expedited (for emergency requests) formulary exceptions process.

The Medicare Part D benefit is similar to commercial prescription drug benefits in that it requires cost-sharing, including a monthly premium (about $32 for a basic plan in 2006), an annual deductible, and copayments. The dual-eligibles will pay no cost-sharing in the nursing home. Others will have reduced cost-sharing responsibilities. Some beneficiaries will have substantial cost-sharing. It is the responsibility of the plans to provide you with the necessary information for collecting any cost-sharing amounts.

KPS Pharmacy will provide training on this benefit, as more information from CMS is released this fall. KPS Pharmacy is developing policies to help in transitioning the claims system for this benefit.

Q: What happens if a patient has a plan that we do not have a contract with?

KPS Pharmacy may bill a Part D plan as an out-of-network provider on occasion, but KPS Pharmacy is committed to partnering with enough Part D plans so that all KPS Pharmacy customers are covered.